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Your guide to business activity statements or BAS

Your guide to business activity statements or BAS

The ATO requires businesses to lodge business activity statements (BAS) quarterly or monthly to avoid penalties, and understanding your responsibilities can be tricky. Here’s a rundown of the requirements.


 

What’s included?

A business activity statement (BAS) is a form used to report business or investment income to the ATO so that related tax obligations can be met. These include:

  • Goods and services tax (GST).
  • Pay as you go (PAYG) instalments and PAYG withheld.
  • Fringe benefits tax (FBT).

Other taxes covered in a BAS include the luxury car tax (LCT), the wine equalisation tax and the deferred superannuation instalment.

When must it be lodged?

If you are registered for GST – or if you need to pay any of the other taxes listed above – you will need to lodge a BAS for each agreed reporting period, which can be monthly or quarterly. If you are reporting monthly, the due date is usually the 21st of the following month. Quarterly lodgement dates fall on the 28th of October, February, April and July. A failure to lodge (FTL) penalty of at least $170 may be levied if you do not submit your BAS on time.

If you have chosen to register for GST but are not required to, you only need to lodge an annual GST return at the same time that you lodge an income tax return.

Many small businesses can elect to report on either a monthly or quarterly timetable. In some cases, the ATO will require monthly lodgement – for example, GST must be reported monthly if the business’s annual turnover is more than $20 million, and PAYG withholding if annual obligations are from $25,001 to $1 million.

To make life easier for businesses that would like to go paperless, the BAS can be lodged electronically through the ATO’s Business Portal.

What can I do if I make a mistake in my BAS?

According to the ATO, you can use your current BAS to correct GST, fuel tax credit and PAYG instalment mistakes made in a previous statement. A four-year time limit applies to the claiming of any additional credits or refunds. To help avoid a dispute or possible penalties, the ATO advises that you keep all financial records pertaining to your BAS for at least five years after lodgement.

Lodging your BAS promptly is an important responsibility. If your finances are complex, or you are uncertain about the accuracy of your reporting, be sure to seek the assistance of an accountant or bookkeeper.

The GST accounting method you choose will affect you come BAS time. We break down two options so you can see which is best suited to your business.

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